INFOCAST CORPORATION
1 Richmond Street West
Toronto, Ontario M5H 3W4
June 1, 1999
To: James William Leech
61 Inglewood Drive
Toronto, Ontario M4T 1H2
We are pleased to inform you that on June 1, 1999, the Board
of Directors of Infocast Corporation (the "Company") granted you a non-qualified
stock option (the "Option") to purchase 750,000 shares of common stock (the
"Shares"), $.001 par value, of the Company ("Common Stock"), at a price of
US$7.00 per Share.
Prior to May 31, 2004 (the date on which the Option will, to
the extent not previously exercised, expire) the Option may be exercised, as
follows: (i) as to 250,000 Shares at any time on or after the date you assume
the position of the Company's President and Chief Executive Officer (the "Start
Date"); (ii) as to an additional 250,000 Shares at any time after the first
anniversary of the Start Date; (iii) as to the remaining 250,000 Shares at any
time after the second anniversary of the Start Date. You must purchase a minimum
of 1,000 Shares each time you choose to purchase Shares, except to purchase the
remaining Shares available to you. In the event of a change in control of the
Company, all Options granted hereby immediately become fully vested and
exercisable. A "change in control" is defined as (i) the direct or indirect
sale, lease, exchange or other transfer of all or substantially all (50% or
more) of the assets of the Company to any person or entity or group of persons
or entities acting jointly or in concert as a partnership or other group (a
"Group of Persons"); (ii) the merger, consolidation or other business
combination of the Company with or into another corporation with the effect that
the shareholders of the Company immediately following the merger, consolidation
or other business combination, hold 50% or less of the combined voting power of
the then outstanding securities of the surviving corporation of such merger,
consolidation or other business combination ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; (iii) the replacement of majority of the Board of Directors of the
Company or of any committee of the Board of Directors of the Company in any
given year as compared to the
directors who constituted the Board of Directors of the Company or such
committee at the beginning of such year, and such replacement shall not have
been approved by the Board of Directors of the Company, as the case may be, as
constituted at the beginning of such year; (iv) a person or Group of Persons
shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases, merger, consolidation or other business
combination, or otherwise, have become the beneficial owner (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
securities of the Company representing 20% or more of the combined voting power
of the then outstanding securities of such corporation ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors; or (v) the voluntary liquidation, dissolution or
winding-up of the Company, in connection with which a distribution is made to
the holders of the Company's Common Stock.
The Option is not transferable and may be exercised solely by
you during your lifetime or after your death by the person or persons entitled
thereto under your will or the laws of descent and distribution. Any attempt to
transfer, assign, pledge or otherwise dispose of, or to subject to execution,
attachment or similar process, the Option contrary to the provisions hereof
shall be void and ineffective and shall give no right to the purported
transferee.
If your employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option shall immediately become
fully vested and exercisable and the Option may thereafter be exercised by the
legal representative of your estate or by your legatee under your will, for a
period of one year after the date of such death or until the expiration of the
stated term of the Option, whichever period is shorter. As used in this
Agreement, the term "Subsidiary" means any Subsidiary of the Company within the
meaning of Section 425(f) of the United States Internal Revenue Code of 1986, as
amended.
If your employment with or service to the Company or any
Subsidiary terminates by reason of disability as will be provided for in your
employment agreement, the Option shall immediately become fully vested and
exercisable and the Option may thereafter be exercised for a period of one year
after the date of such termination of employment or service or until the
expiration of the stated term of the Option, whichever period is shorter.
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If your employment with or service to the Company or any
Subsidiary is terminated by the Company for cause as will be provided for in
your employment agreement, the Option shall thereupon immediately terminate.
If your employment with or service to the Company or any
Subsidiary is terminated by the Company for any reason other than cause, death,
disability or at any time within 24 months following the occurrence of a "change
in control," the Option shall immediately become fully vested and exercisable
and the Option may be exercised for the lesser of 24 months after the date of
termination or the balance of the Option's term. Your transfer from the employ
of the Company to a Subsidiary, or vice versa, or from one Subsidiary to
another, shall not be deemed to constitute a termination of employment for
purposes of the Option.
If your employment with or service to the Company or any
Subsidiary is terminated by the Company at any time within 24 months following
the occurrence of a "change in control", the Option may be exercised for the
lesser of 36 months after the date of termination or the balance of the Option's
term.
If your employment with or service to the Company or any
Subsidiary is terminated by you, the Option shall thereupon immediately
terminate except that the portion of the Option that was exercisable on the date
of such termination of employment or service may thereafter be exercised for a
period of 30 days after the date of such termination of employment or service or
until the expiration of the stated term of the Option, whichever period is
shorter.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Common Stock, the Board of Directors of the Company shall make an
appropriate and equitable adjustment in the number and option price of shares
subject to the Option to the end that after such event your proportionate
interest shall be maintained as immediately before the occurrence of such event.
The Company may make such provisions as it may deem
appropriate, consistent with applicable law, in connection with the Option with
respect to the withholding of any taxes or any other tax matters.
The Company, in its sole discretion, may file a registration
statement under the Securities Act of 1933, as amended (the "Act"), in order to
register the Shares. Unless at the time of the exercise of the Option a
registration statement under the Act is in effect as to such Shares, any Shares
purchased by you upon the exercise of the Option shall be acquired for
investment and not for sale or distribution, and if the Company so requests,
upon any exercise of the Option, in whole or in part, you will execute and
deliver to the Company a certificate to such effect. The Company shall not be
obligated to issue any Shares pursuant to the Option if, in the opinion of
counsel to the Company, the Shares to be so issued are required to be registered
or otherwise qualified under the Act or under any other applicable statute,
regulation or ordinance affecting the sale of securities, unless
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and until such Shares have been so registered or otherwise qualified.
You understand and acknowledge that, under existing law,
unless at the time of the exercise of the Option a registration statement under
the Act is in effect as to such Shares (i) any Shares purchased by you upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be made only in accordance with the terms
and conditions of that Rule (which, under certain circumstances, restrict the
number of shares which may be sold and the manner in which shares may be sold);
(iii) in the case of securities to which Rule 144 is not applicable, compliance
with some other disclosure exemption will be required before any Shares may be
sold; (iv) certificates for Shares to be issued to you hereunder shall bear a
legend to the effect that the Shares have not been registered under the Act and
that the Shares may not be sold, hypothecated or otherwise transferred in the
absence of an effective registration statement under the Act relating thereto or
an opinion of counsel satisfactory to the Company that such registration is not
required; (v) the Company will place an appropriate "stop transfer" order with
its transfer agent with respect to such Shares; and (vi) the Company has
undertaken no obligation to register the Shares or to include the Shares in any
registration statement which may be filed by it subsequent to the issuance of
the Shares to you.
The Option (or installment thereof) is to be exercised by
delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of Shares to be purchased, together
with payment in full of the purchase price of the Shares to be purchased. The
purchase price is to be paid in cash, by check, such other instrument as may be
acceptable to the Board of Directors of the Company, or, at the discretion of
the Board of Directors of the Company, by delivering shares of Common Stock
already owned by you and having a Fair Market Value (as hereinafter defined) on
the trading day immediately preceding the date of exercise equal to the exercise
price of the Option, or a combination of shares of Common Stock and cash.
Fair Market Value means the closing price of publicly traded
shares of Common Stock on the principal securities exchange on which shares of
Common Stock are listed (if the shares of Common Stock are so listed), or on the
NASDAQ Stock Market (if the shares of Common Stock are regularly quoted on the
NASDAQ Stock Market), or, if not so listed or regularly quoted, the mean between
the
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closing bid and asked prices of publicly traded shares of Common Stock in the
over-the-counter market, or, if such bid and asked prices shall not be
available, as reported by any nationally recognized quotation service selected
by the Company, or as determined by the Board of Directors of the Company.
Anything in this provision to the contrary notwithstanding, in no event shall
the purchase price of a share of Common Stock be less than the minimum price
permitted under rules and policies of the rules and policies of the national
securities exchange on which the shares of Common Stock are listed.
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Would you kindly evidence your acceptance of the Option and
your agreement to comply with the provisions hereof by executing this letter
under the words "Agreed To and Accepted."
Very truly yours,
INFOCAST CORPORATION
By:/S/ A.T. Griffis
---------------------
Name: A. Thomas Griffis
Title: Chairman of the Board
AGREED TO AND ACCEPTED:
/s/ James William Leech
James William Leech
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Exhibit A
INFOCAST CORPORATION
1 Richmond Street West
Toronto, Ontario M5H 3W4
Gentlemen:
Notice is hereby given of my election to purchase _____ Shares
of Common Stock, $.001 par value (the "Shares"), of Infocast Corporation at a
price of U.S.$_____ per Share, pursuant to the provisions of the option granted
to me on June 1, 1999. Enclosed in payment for the Shares is:
----
/___/ my check in the amount of $________.
----
*/___/ ___________ Shares having a total value
$________.
The following information is supplied for use in issuing and
registering the Shares purchased hereby:
Number of Certificates
and Denominations ___________________
Name ___________________
Address ___________________
___________________
Social Security Number ___________________
Dated: _______________, ____
Very truly yours,
--------------------------
*Subject to the approval of the
Board of Directors
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